June 19, 2012

Will Apple Become World’s Most Profitable Company EVER?

Remember months ago when a certain analyst predicted Apple would hit $1,001 a share in just 12 months? Those were crazy times, weren´t they? Fun time, free times, a more innocent age.

Of course, the same analyst then reconfigured his estimate, saying Apple would actually hit the more aesthetically pleasing $1,111 “over the next year.”

Now it seems Bryan White of Topeka Capital Markets is at it again, remaining ever bullish on Apple, Inc. According to a report by the Boy Genius Report, White has issued a note wherein he predicts Apple will soon become the World´s Most Profitable Publicly Traded Company EVER.

In his note, White explains Apple is already on their way "to generate the highest annual net income of any publicly traded company ever."

White also pointed out in his note that he´s been hearing talk ℠round The Street over the past several weeks about a $500 billion market cap which could act as a barrier to Apple´s growth. Such “barriers” have affected companies in the past, and others have listed this barrier as a threshold for stocks. Apple´s current market cap at the time of this writing is near $545 billion. According to analysts, some believe the fact that Apple is already over this barrier means Apple will stop growing. Not so, says White. White believes Apple´s market cap could grow as high as to reach the trillion dollar mark.

“We went back and analyzed five U.S.-based companies that at one time enjoyed market capitalizations of (about) $500 billion or more, but found little similarities with Apple,” writes White. Those 5 companies mentioned in his note were Cisco Systems, Exxon-Mobile, General Electric, Intel and Microsoft.

Unlike the aforementioned tech companies, Apple does not hold a “monopoly like market share position.”

For instance, Apple competes with several smartphone manufacturers all over the world, most notably Samsung.

“Microsoft held over 90% market share for PC operating systems at the peak cap, while Cisco had over 70% share in the networking market and Intel had over 80% of the PC processor market,” White said.

“By comparison, IDC estimates that Apple held just 4.7% of the PC market in (the first quarter of 2012) and 8.8% share in the mobile phone market.”

And even though Apple´s iPad is currently dominating with 68% of the tablet market, White says this doesn´t count, as he believes Apple themselves invented that very market.

White says Apple will soar past everyone´s expectations thanks to the iPhone “5," the Rumored iPad Mini and the Rumored Apple Television. The iPhone “5” (if that´s what it will be called) is expected as soon as this fall, while rumors of the iPad Mini and Apple Television refuse to wither away. According to White, Apple is preparing for an “exciting September,” mentioning the Cupertino company has been hard at work negotiating some “local contracts” in their supply chain in Taipei. While White makes some very colorful and exciting predictions, we´ll have to stand ever by to find out if they will ever come true.